Township enterprises are farmer-initiated enterprises in rural areas. Huge gains in agricultural efficiency have released huge numbers of rural laborers from the land, thus laying the basis for the development of township enterprises whose competitively priced goods and services sell well across China.  

Township enterprises are involved in many sectors, e.g., industry, agricultural processing, transportation and communications, construction, commerce and catering. By 2005, 22.5 million township enterprises, with 142.72 million employees were generating 5,053.4 billion yuan in added value, an 8.4 percent increase over 2004. Township enterprises have been the main driving force for the increase in farmers' income and rural economic development, absorbing about 30 percent of the rural labor force. 

Township enterprises have evolved over a long time to become the leading power in the county-level economy and one of the most vibrant growth points in the national economy.  In 2005, two thirds of enterprises with an annual turnover of over 10 million yuan had their own research organs, and a raft of well-known enterprises took shape, enterprises with innovation capability and intellectual property rights.